Air NZ faces job cuts, seeks marketing help

Air New Zealand is blaming the Government for not spending enough on marketing the country to overseas tourists as it faces cutting as many as 80 jobs.

"The airline shares in the widespread industry disappointment that the Government is yet to increase its support for New Zealand's No 1 export earner," the airline said yesterday.

It told the stock exchange that while it continued to spend more than $100 million a year on marketing itself and New Zealand overseas, severe economic conditions and bigger budgets wielded by competing destinations were reducing the impact.

The broadside came as Air New Zealand served notice on unions of "a potential surplus" of up to 40 cabin crew and pilots in its regional airline subsidiaries and its national jet operation, and a similar number of airport handlers in Auckland and Christchurch.

Air New Zealand, which already cut 200 jobs late last year, said the latest round of restructuring had been forced on it by a need to reduce seats by a further 3% in response to falling demand.

That follows a 13% reduction since the 2007-08 financial year.

The latest changes will result in Air New Zealand cutting flights on its Hong Kong-London service from seven days a week to just five days from mid-October, and reducing frequency on domestic routes serviced by its regional airlines.

It said it was also "exploring options to address the need for workplace flexibility" on its transtasman Zeal 320 subsidiary services, to keep fares competitive.

The Engineering, Printing and Manufacturing Union said that suggestion raised legal issues, since the union was still involved in bargaining with the airline for a new collective contract for its Zeal 320 members.

Its national aviation organiser, Strachan Crang, said the airline was required in law to keep pay bargaining and restructuring separate.

He said the union, which represented 3500 of Air NZ's 11,000 employees, would be "casting a very critical eye over any proposals to ensure they are justified and to protect our members' interests".

The airline said it had been reducing staffing costs in corporate headquarters through initiatives such as a four-day working week, unpaid leave and pay and hiring freezes.

It said it would lobby the Government strongly in coming weeks to increase funding for tourism promotion, saying it saw strong evidence that people still wanted to travel.

"The challenge is to present potential travellers with the right proposition at the right price, and that requires investment in marketing and communications," the airline said.

"This investment in marketing will help sustain the tourism industry through this challenging period and help secure the 180,000 jobs dependent on the sector."